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Daily News Roundup: Wednesday, 24th October 2018

Posted: 24th October 2018


TSB sees 16k account holders switch to rivals

Figures from BACS, which runs the Current Account Switch Service, show that 16,641 TSB current account holders switched to a rival between April and June, with it believed that IT issues which plagued the bank in April contributed to the number of account holders taking their business elsewhere. After TSB, RBS lost the next largest number of customers to rivals, at 12,362, while NatWest lost 12,053. The biggest gainer was Nationwide, which saw 34,577 new customers in the period, followed by HSBC which added 25,605. A TSB spokeswoman said: "During the three months in question we actually saw more than 20,000 customers either open a new bank account at one of our branches or switch their account to us using the Cass system."

Study highlights overdraft fee discrepancies

A Uswitch study suggests large banks are charging overdraft fees 50 times higher than the best rates on the market, leaving up to 12m account holders paying up to £87 a year. The study shows that the average high street bank charges £56.52 a year for a customer who uses a previously agreed overdraft, compared to the £1.56 charge issued by HSBC-owned First Direct. Uswitch says users of TSB’s Classic account pay an average £85.44 a year in fees, while the largest fee was found at RBS, with a charge of £87.36.

Banks looking for Budget boost

UK Finance has, in a detailed submission to the Chancellor, suggested that "the time may be due for a strategic review of government policy toward bank-specific taxes". It has commissioned two reports on the matter, with one looking at UK banks' total tax contribution and another at how the UK compares with other countries. UK Finance’s focus is said to be on the bank levy introduced in the aftermath of the financial crisis and the corporation surcharge tax on banks.

NatWest increases funding for firms preparing for Brexit

RBS is trebling its "growth fund" for small businesses to £3bn, up from an initial £1bn revealed in May this year, with the cash to be made available through NatWest. The bank has identified almost 2,000 business customers it believes may need extra cash to help weather Brexit and is already "proactively" contacting them. Alison Rose, chief executive of commercial and private banking at NatWest, said: "We are committed to helping UK businesses access the right financing products so they can meet their short and longer term trade and working capital needs – whatever the outcome of the Brexit process." Of the original £1bn fund, £900m has so far been approved for investment.

Barclays looks to ease millennial anxiety

Barclays is targeting millennials with a service offering free, informal financial advice. This comes on the back of research showing that 37% of those aged between 22 and 36 are anxious about checking their bank balance. The study found that money-related stress among the group hit a peak after monthly direct debits were taken out, with 23% saying this was the day they most feared checking their balance, while one in ten said they felt anxious checking their account the morning after a night out. Barclays is trialling the new service at six branches.

Tide boss: Fund plan a missed opportunity

Oliver Prill, chief executive of fintech Tide, questions the thinking behind the £775m of grant funding for improving competition and innovation in the business banking services market. He notes that the Government has reserved “the lion's share” for banks, with non-banks eligible to apply for a maximum of £10m. This, he argues, is “a waste of once-in-a-generation opportunity to blow open competition” for the benefit of SMEs. He adds a call for ministers to “put the interests of the nearly six million small businesses across the country ahead of that of the big banks.”


HMRC victorious in £79m tax avoidance case

HMRC has won a £79m tax avoidance case against Goldman Sachs and Cargill. The case relates to a tax avoidance scheme set up in 2006-07 when the US giants owned the now-defunct Teesside power station.

Private equity deals surge in Asia

Data from Refinitiv highlights a surge in dealmaking by private equity firms in Asia. Excluding Japan, private equity-backed deals in Asia-Pacific have totalled $79bn so far this year. This marks a 63% increase on the same period of last year and surpasses the $74bn full-year record set in 2015.

BlackRock seeks lead role in sustainable investing

BlackRock chairman and chief executive Larry Fink says the firm intends to become a global leader in "sustainable investing", saying it will “be a core component for how everyone invests in the future.”


Minister: Danske disclosures probed

Denmark’s business minister Rasmus Jarlov has said the country’s Financial Supervisory Authority (FSA) needs to establish whether Danske Bank intentionally misled the body over possible money laundering at its Estonian branch. The FSA is currently investigating the matter and Mr Jarlov notes that if the probe shows Danske Bank knowingly gave false information, the case will be handed over to Denmark's state prosecutor for financial crime.

Eurozone’s banking supervisor shortlist down to final pair

Ireland's central bank deputy governor Sharon Donnery and European Banking Authority chair Andrea Enria are the last candidates in the contest to lead the Single Supervisory Mechanism.

CCB profit climbs in Q3

China Construction Bank Corp saw net profit rise 6.6% in the third quarter, hitting 67.08bn yuan in the three months to September 30 from 62.9bn yuan a year earlier.

Deutsche Bank hires BoE cloud specialist

Deutsche Bank has hired Deeptasree Mitra, a former IT head at the Bank of England, as head of cloud platforms for data solutions in its global transaction banking division.

NAB showcases facial recognition ATM

National Australia Bank and Microsoft have created a futuristic ATM that allows people to withdraw cash using their face and a pin, meaning users do not need cards or devices to access their money. The system, developed by Azure Cognitive Services and unveiled at the 2018 SIBOS conference in Sydney, utilises facial recognition and artificial intelligence to identify users.


Dyson chooses Singapore to build electric cars

Dyson has picked Singapore to manufacture the company’s first electric car, with ambitious plans to diversify from production of vacuum cleaners, hand dryers and air purifiers, and to challenge Tesla within the automotive market. The Singapore factory is expected to be completed by 2020 with a goal of rolling out its first model the following year.


Lockheed Martin raises earnings guidance after strong third-quarter

Production of the F-35 jet contributed to Lockheed Martin upping its full-year earnings guidance, after the defence contractor revealed increased net sales of $14.3bn for the quarter ended September 30.


Lloyds and Schroders in wealth management link

Lloyds Banking Group and Schroders have entered into a wealth management alliance. The move will deliver an investment and wealth planning service for those with up to £1m. Lloyds will own 50.1% of the new entity and Schroders 49.9%. Lloyds' Antonio Lorenzo will be named chairman, while Schroders’ James Rainbow will become chief executive. Antonio Lorenzo, director of insurance and wealth at Lloyds and chief executive of its Scottish Widows subsidiary, said: "The aim is to become a top three UK financial planning business within five years." The tie-up will see Schroders will take on an £80bn investment contract from Scottish Widows.

St James's hits £100bn assets under management

Wealth manager St James's Place has hit a record-breaking £100.6bn in funds under management, up 11% since the start of the year. The fund saw gross inflows of £11.75bn in the nine months to the end of September, up 12% on the previous year.

Nutmeg breaks £1bn with people's changing habits

Nutmeg has doubled its number of customers in the last 12 months to 48,700 to become the UK's first online wealth manager to reach more than £1bn in assets under management. “The way people save, invest and manage their money is changing,” said Nutmeg's chief executive Martin Stead. Year-on-year, the business's assets under management have grown by 93%, dwarfing the sector's average increase of 17%.

Blockchain technology poised to enter European settlement system

UK fintech outfit Setl is to connect with the European Central Bank-affiliated target2-Securities platform to boost efficiencies in cross-border payments with its blockchain technology.

Merian Global Investors seeking Asia expansion

London-based asset management firm Merian Global Investors is seeking expansion into Asia with an agreement with Hong Kong asset management firm Ping An to allow the firms to partner on fund distribution, marketing and investment advisory services.


Whitbread eyes hotels move

In the leisure giant's first set of financial results since announcing the £3.9bn sale of Costa Coffee in August, Whitbread has revealed ambitious growth plans for Premier Inn - with plans for over 100,000 rooms in the UK, up from the 74,000 it already owns. Whitbread’s pre-tax profits were flat at £257m.


Brexit bites into manufacturing orders

British manufacturing orders fell at their fastest pace since October 2015 in the third quarter, according to the latest statistics from the Confederation of British Industry (CBI), amid continuing uncertainty over a Brexit deal.


Tough retailer climate dragging on Intu's portfolio

The value of Intu's property portfolio has fallen from £9.83bn in June to £9.58bn in the three months to the end of September, reflecting “current negative sentiment towards UK retail property”. Intu said the tough high street climate is likely to impact like-for-like growth by 1.5%, though it has increased occupancy by 0.4% to 97%.


Wickes is Travis Perkins' weak link

Building materials supplier Travis Perkins' group-wide sales increased 3.9% in the three months to the end of September, while like-for-like sales rose 4.1% on the back of plumbing and heating materials. Sales in its consumer division Wickes fell 4.2% in its third quarter.


Young workers enjoy biggest pay rises

Analysis by the ONS suggests that while young Britons have been worst-hit by the squeeze on living standards, when it comes to pay rises they are ahead of the rest. The typical worker aged 16 to 24 is getting an annual pay rise of almost 30%, whereas the typical 56 to 64-year-old is getting only 1.6%.


Cranston is a woman of note

The Royal Bank of Scotland’s new £20 note has been unveiled and will be the first Scottish £20 banknote to feature a woman other than the Queen on the front. The note carries a picture of Kate Cranston, an entrepreneur who commissioned the famous Mackintosh tearoom in Glasgow.

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